Expert meeting on the transformation of the European automotive industry

Janna Aljets

Consultation of trade unionists, academics and policy experts at RLS Brussels

On 26 September 2019, the Rosa-Luxemburg-Stiftung in Brussels hosted a first major expert meeting on the transformation of the European automotive industry, an industry that is under pressure for a number of reasons. First of all, the economic model of producing cars with internal combustion engines in a mass production is approaching the limits of its environmental viability. Resources are becoming scarce, CO2 emissions need to fall sharply, especially in the transport sector, and air pollution from motorised private transport is becoming a growing problem in conurban areas across Europe. Secondly, the once leading European car industry faces increasing competition from the USA and China. So far, European carmakers have been extremely slow to pick up on the latest technical developments, such as the introduction of new drives, and will certainly struggle to catch up. Last but not least, digitalisation is not only bringing in new production and working methods, but also totally new types of more interconnected cars that function more autonomously. Ultimately, the big question is what form transport can take in the future, in light of the climate crisis, congested cities and greater mobility needs.

Particularly in urban centres, the current norm of driving around in ever larger and heavier private cars powered by internal combustion engines, can no longer be the answer. For all these reasons, question marks are now hanging over the automotive industry’s entire production model, for decades the backbone of the capitalist export economy. Indeed, the entire European economy depends on an industrial model that is no longer sustainable, endangering 3.5 million jobs across Europe. So how can industry be transformed in a way that doesn’t worsen the situation faced by these employees, while at the same time swiftly implementing the environmental transformation that is so badly needed?

This was precisely the question that was put to the 35 experts from trade unions, science and the policy level from 12 countries. In productive and constructive discussions, they jointly mapped out the main political fault lines and, on that basis, developed progressive strategies for left-wing actors in Europe. By organising the meeting, the RLS also publicly showcased its new policy priority. The hope is that this group of experts will turn into an enduring network devoted to the issue of a socio-ecological transformation.

Pressure on the automotive industry to change

In a first round of discussions, the participants listened to inputs which detailed the various challenges automotive industry is facing. For example, they stressed how ongoing changes in the industry are already putting workers under tremendous pressure, and that unless many suppliers upgrade their technology, they will remain highly dependent on original equipment manufacturers (OEMs), who dictate the major trends. The imminent switch to electric vehicles was also discussed, not without criticism, since its ecological benefits and social compatibility in terms of job losses are questionable. According to the global union IndustriALL, 600,000 jobs may be under threat.

Nevertheless, for the time being, there are no alternative methods of producing environmentally friendly cars. Many of the participants insisted that much of the responsibility lies with the managements of corporations, who had so far missed the opportunity to embrace change and had lost credibility in the wake of the diesel scandal.

However, the ensuing discussion started off by underscoring the potential opportunities of a broader industrial conversion. For instance, it was stressed that the car industry, especially in Germany, has become an extremely powerful political actor, influencing many democratic decision-making processes at European and national levels in its favour. This undemocratic power over regulations and political decision-making has to be broken, the experts said. They also pointed out that greater de-globalisation as a result of industrial conversion could create new markets and an integrative industry with better working conditions. Another idea for converting the car industry could entail updating existing models instead of always building new ones. This first round of discussions ended by identifying two major challenges: firstly, employees needed to be convinced that major industrial conversion will genuinely create better jobs. Secondly, any industrial conversion would have to be part of a socio-environmental transformation of the transport system. However, many experts felt this is more of a political than a technical issue.

Different situations in each country

In the second round of their meeting, experts presented the situations in individual countries. Only some of their inputs and views can be listed here.

The first countries discussed were those with a strong supplier industry. In Austria, both the forthcoming switch to electric vehicles as well as the just-in-time production are causing job fears. Serbia is particularly dependent on German OEMs and, despite a very low level of unionisation, finds itself fending off cheaper competitors from countries like North Macedonia. In Slovenia, the automotive industry is the main pillar of the national economy, and its unionised workforce is very keen to see more international trade union cooperation. In Hungary, not even a tenth of workers are unionised. Automation and digitalisation are causing great uncertainty, since up to now production has been characterised mostly by low added value.

But even in those countries where OEMs are more strongly represented and technological and economic goals are often clearer, workers feel just as uncertain. In Germany, the diesel scandal and the new EU fleet targets have triggered intense debate about future mobility systems and their impact on jobs. In Spain, the industry’s transformation is already making itself felt, in the form of a steady drop in production. Yet this situation is also viewed as an opportunity, provided that workers spearhead change and get better jobs, aided by retraining. In Belgium, where large parts of the workforce is unionised, production has also dropped sharply. Here, the union in question blames the problems on hierarchical decision-making by corporations. Trade unionists from France reported on the recent closure of a factory in Blanquefort that resulted in thousands of job losses. No support whatsoever was provided by policymakers.

How could transitions be made fair for workers and the industry?

A third round of discussions touched on first ideas and approaches to alternative production and employment. Above all, it was made clear that the European automotive industry faces a paradigm shift that will call into question Europe’s entire economic model. In many places, the scope of the problem has not been recognised, though it’s essential that this happens. On the one hand, car production needs to be cut back, which would necessitate a European structural plan. On the other, we need fewer cars and thus a fundamentally new kind of transport system. The third industrial revolution will be decarbonised and digitalised. The danger is that some countries or regions will be left behind, which is where regional de-industrialisation and impoverishment has to be avoided. Technological, environmental, economic and social pressure could be eased by retraining, but also by reducing working hours.

But the global dimension mustn’t be neglected in this context either. Neoliberal trade policies that are changing national economies also need to be taken into account. At European and international levels, the experts called for greater knowledge transfer, more subsidies for an industrial transformation and bigger investments in new productions.

On the whole, there was widespread agreement that the industry needs to do more than ‘go green’: instead it should undergo a fundamental transformation. Yet precisely because the climate crisis is a social issue, it should and could also be tackled by workers in production facilities and trade unions. For this to happen, production needs to pass into government or public hands, and the prospect of expropriations in the common interest should be discussed.

The experts will meet up again for further consultations in 2020. The program of the meeting held on 26 September 2019 can be found below. If you have any questions or comments on the expert consultation, please e-mail the project manager, Janna Aljets, at janna.aljets(at)rosalux(dot)org.


ProgramPDF file